One most often thinks of “exports” as tangible goods transported via container ship — cars, textiles and agricultural products like corn and wheat. States that produce such items, and which have been among the hardest-hit by the shifting global economy, were difference-makers in the November election: North Carolina, Michigan and Wisconsin, to name a few.
But one of the best-performing US exports largely flies under the radar: inbound international travel. Why does it count as an export if we’re not actually shipping anything abroad? Because it entails foreign currency being spent on goods and services produced in the United States — namely, visitors from abroad spending their money at US hotels, restaurants and tourist attractions.
Travel is already our country’s No. 1 service export, and our second-largest export overall. At $246 billion, international travel accounted for 11.2% of all US exports in 2016. According to our analysis of data from the US Department of Commerce, we enjoyed an $87 billion international travel trade surplus in 2016, larger than any other sector of the US economy. Without travel, the country’s $500 billion trade deficit would be 17% larger.
As for jobs, travel is a top-10 employer in 49 states and the District of Columbia, supporting 15.1 million total US jobs. The best part? Those jobs are 100% “un-exportable;” it’s simply not possible to outsource the role of a waiter, front-desk clerk or tour guide to a call center in Bangladesh.
The United States welcomed more than 77 million international visitors last year, half of which came from overseas (all countries excluding Canada and Mexico) and spent an average of $4,337 per trip. Even a marginal decline in that momentum could send immediate ripples throughout the US economy.
Admittedly, President Trump’s executive orders on visas and immigration have been perceived by many as at odds with the objective of bringing more visitors to our shores. Security is certainly a laudable aim; I often say that without security, there can be no travel, as most vividly evidenced by our industry’s utter collapse in the immediate aftermath of 9/11.
But the administration has failed to make clear that legitimate international business and leisure travelers continue to be welcomed and valued by the United States. Data indicating softening demand for travel to the United States is likely attributable to the January 27 executive order on visas and immigration, according to multiple organizations that track travel statistics.
The White House must move swiftly to correct negative perceptions of travel to the United States in order to have any hope of achieving its stated economic aims of improving the US trade balance and protecting quality domestic jobs.
In addition to including more of a “welcome message” regarding legitimate travelers in its public rhetoric about national security, the Trump administration can help bolster the international travel market by taking concrete steps now to support some other policies outside the national security sphere. To wit:
Protect Open Skies agreements. These agreements prevent governments — both ours and our treaty partners’ — from meddling with issues such as routes or pricing in the passenger aviation marketplace. They have inarguably been a huge boon to the US economy, bringing in more visitors and adding airline choices — often low-cost and high-value — for American consumers. For almost two years, the agreements have come under malicious attack from the Big Three domestic airlines (American, Delta and United) and their unions in an effort to suppress competition from foreign carriers. Rolling back Open Skies would be sheer economic madness.
Continue to support Brand USA. The international travel market is brutally competitive, and before 2011 the United States had no national entity promoting it as a destination. That changed when Congress created Brand USA, which markets the United States abroad through advertising and offering traveler outreach and assistance. Brand USA spends no taxpayer dollars for this, relying instead on fees collected from international visitors. The organization has measurably increased the volume of inbound travel — and now, its mission of promoting the United States as a welcoming and unique destination is more critical than ever. If we let our marketing efforts flag, competitors such as France and China would happily snatch up our piece of the global travel pie.
Keep up the clarion call for infrastructure investments. Our airports are notoriously lagging behind state-of-the art facilities in Europe, Asia and the Middle East — including many outstanding projects that are relevant to security efforts. President Trump’s emphasis on infrastructure issues is most welcome.
Any plan to address the US trade deficit and promote strong domestic job creation must necessarily include federal policy support for inbound international travel. I predict that we will see numerous elements of the blueprint above become part of the Trump administration agenda, which would be an acknowledgment of the reality that a healthy and growing US economy is one that remains connected to the world.